Mortgage loan
Okay kiddo, so you know how when mommy and daddy bought our house, we didn't just have all the money we needed to pay for it upfront, right? So we got something called a mortgage loan to help us pay for it in smaller parts over a really long time.
A mortgage loan is like borrowing a lot of money from a special company called a bank or a lender, and then using that money to buy a house or property. But the bank doesn't just give you all the money at once, they give you a little bit of it at a time, and you have to pay it back with extra money called interest over many years.
Let's say we borrowed $200,000 for our house, which is a lot of money, right? So the bank gives us that money, and then we have to pay back some of it every month for 30 years. That means we have to make 360 payments, which is a really big number! We have to pay back the original $200,000 plus some extra money called interest, which is like a fee for borrowing the money. The interest is usually a small percent of the total amount we borrowed, and it adds up over time.
Paying back a mortgage loan is like having a really big piggy bank that we have to fill up a little bit every month. If we miss a payment, the bank might get mad and take our house away, so it's very important to always pay on time. We also have to take care of our house and keep it in good condition, because it's like the bank's piggy bank too, and they want it to be worth a lot of money in case they need to sell it.
That's basically what a mortgage loan is, sweetie. It's like a big loan you get when you want to buy a house, and you have to pay it back over a lot of years with interest. It's a big responsibility, but it's also a really great way to have a home that belongs to you and your family.
A mortgage loan is like borrowing a lot of money from a special company called a bank or a lender, and then using that money to buy a house or property. But the bank doesn't just give you all the money at once, they give you a little bit of it at a time, and you have to pay it back with extra money called interest over many years.
Let's say we borrowed $200,000 for our house, which is a lot of money, right? So the bank gives us that money, and then we have to pay back some of it every month for 30 years. That means we have to make 360 payments, which is a really big number! We have to pay back the original $200,000 plus some extra money called interest, which is like a fee for borrowing the money. The interest is usually a small percent of the total amount we borrowed, and it adds up over time.
Paying back a mortgage loan is like having a really big piggy bank that we have to fill up a little bit every month. If we miss a payment, the bank might get mad and take our house away, so it's very important to always pay on time. We also have to take care of our house and keep it in good condition, because it's like the bank's piggy bank too, and they want it to be worth a lot of money in case they need to sell it.
That's basically what a mortgage loan is, sweetie. It's like a big loan you get when you want to buy a house, and you have to pay it back over a lot of years with interest. It's a big responsibility, but it's also a really great way to have a home that belongs to you and your family.
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